How has the Autumn Budget affects SME companies?
Robert Gordon, CEO of Hitachi Capital UK, reacts to the Autumn Budget.
The budget provided a welcome boost for SMEs. Bringing forward a planned business rate switch from RBI to CPI by two years, to April 2018, worth a reported £2.3bn to businesses over next five years, can only be a good thing.
The reduced business rates will help to free up capital, providing the right conditions to stimulate growth.
Establishing a new £2.5 billion Investment Fund, incubated in the British Business Bank, is also a positive move. By co-investing with the private sector, the Government estimates this could unlock £7.5 billion of investment in the coming years.
The British Business Bank has a strong track record, however we’d encourage the Government to publish further details in order to attract suitable private investment and make the new fund operational.
Productivity is one of the biggest business challenges facing the UK today and will be ultimately be one of the key barometers of success in the months following today’s announcement.
A commitment to improved transport links, £2.3bn investment in R&D and emerging technologies are a move in the right direction, but businesses ultimately require tangible support to enable them to grow.
The Government must therefore include all business sectors in their consultation around the Industrial Strategy White Paper to demonstrate that they are taking the productivity issue seriously across the board.
Creating the right business conditions to encourage meaningful investment is an imperative and this requires clearer direction and assistance to help UK businesses finance their growth.
Electric vehicle infrastructure
The Budget includes a number of measures to incentivise the uptake of clean vehicles.
The £100m Plug-In Car Grant will provide a much needed boost to the motor industry and go some way to encouraging consumers to switch to electric cars, but we would have expected to see more clarity from the Government over how it plans to fund the necessary infrastructure to support the move to alternative fuel vehicles.
The £400m to support the growth of charge point companies represents the first step in creating a holistic electric car infrastructure and the fund should provide a boost to the industry; however, the Government will need to allocate more funding and incentives in the coming years, to give consumers the confidence to invest and ensure electric vehicles are increasingly viable.
With the Government also set to review the existing fuel duty rates for alternatives to petrol and diesel, it is an opportune time for businesses to invest in alternative fuels to avoid facing a significant capital expenditure outlay in the years to come.